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Forecast: Massive Jump In Social Spending


One of the many revenue challenges radio stations are trying to master is leveraging listeners who follow them on Social Media and converting that loyalty into revenue. As if multiple stations, promotions, NTR events, websites, texting and so on weren't enough to sell, along comes a new product their listeners absolutely love. But while digital revenue show signs of life for radio, social media is not much more than an extension of a radio station brand. Is there any way to get our hands into that big pot of money? A pot, according to BIA/Kelsey, that's about to explode.

BIA/Kelsey is forecasting U.S. social media ad revenue will grow from $4.6 billion this year to $9.2 billion in 2016. And, the local segment of U.S. social media ad revenues will grow from $1.1 billion in 2012 to $3 billion in 2016.

So what's driving that revenue? BIA's Jed Williams says, “The continued development of native ads, such as Facebook’s Sponsored Stories and Twitter’s Promoted Tweets, and the acceleration of mobile monetization will be the primary drivers of social advertising growth through 2016.”

BIA says social display advertising will continue to account for a higher percentage of revenues, due in large part to Facebook’s Marketplace Ads and YouTube’s multiple display units (video, traditional banners). BIA/Kelsey expects growth to also come from native social ad formats, "which are emerging as viable display alternatives." Native social advertising is defined as branded content integrated within a social network experience (e.g., the newsfeed or content stream). "Spending on native social advertising will grow from $1.5 billion in 2012 to $3.9 billion in 2016. Growth will be driven by the higher premiums native social ad units command."

(11/26/2012 4:26:46 PM)
Yes, there is a way for radio to get their hands in the pot! Through a combination of social strategy and technology. Spending/revenues are climbing for the obvious reason: because it's where the largest and (data-wise) richest audience currently spends their time.

First, radio stations can increase the value of their digital ad inventory by both placing their core content (i.e. radio stream) directly in front of their social audience; second, by extracting their fans demographic data.

- Vanessa
(11/26/2012 12:24:00 PM)
Truly this is an easy win for Radio. Most have no idea however how to leverage Social Media for Monetization. It's done by many of my clients, the broadcasters really suck at it. Good news is they are built for Social Media, bad news is it requires a plan, that is longer than a quarter and leaders from outside of Radio.

- dave presher
(11/26/2012 10:45:06 AM)
Since radio has extraordinay expertise selling locally, this should not be a challenge. Radio should be able to be part of the flow of that revenue stream, to define it and grow it. The key is who is in charge of the digital initiatives at the radio companies. If it is creatives/sellers/marketers radio will be fine. If it's computer code experts; trouble.

- Walter Sabo
(11/26/2012 8:32:37 AM)
This is not good news for radio, but not for the obvious reasons.
What all this does is create a furor and a frenzy for radio management- who are rank amateurs in this area - to focus their attentions and resources on a field in which they have no competency.
The very real and more desperate challenge for radio has and continues to be in Programming and Creative.

- Ronald T. Robinson

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